At the end of 2019 it was looking like real estate was heading for a correction, there had been a solid 8+ years of rising prices and based on past markets real estate was due for a correction. What nobody saw coming was a pandemic, Covid 19 changed how people view and value their homes. Fueled by low interest rates and Covid Cash, homes sales in the summer of 2020 became a runaway train with homes selling way over list price with multiple offers immediately after listing. This continued all the way till the fall of 2022 when rising interest rates finally took the steam out of the engine.
Since then home sales have been a roller coaster, we saw really weak sales in the fall of 2022, only to see a huge rebound in the late winter and spring of 2023. The market then flattened out in the summer of 2023 and that leads us to, which is a relatively weak fall market with a few bright spots.
So what will 2024 bring us, I foresee 2 things that will change for the better and 2 things that will remain mostly the same
For the better will be interest rates, after peaking at 8% in October rates have been steadily coming down and are firmly in the 6's now with the possibility of 5's before the end of 2024. At their last meeting, the Federal Reserve chairman said that he expects to low rates several times next year.
Not Changing, low inventory. We need to realize that there is about 5 million homes less in the United States than the demand for homes calls for. There are just not enough homes and the ability to build the amount needed would take 10 years to catch up. The inventory of available homes will remain low and it will remain a sellers market for the foreseeable future.
Changing, the number of new construction homes. Builders are doing everything they can to build more homes and have more homes available. They see the extreme shortage in the resale market as their opportunity to build and sell more homes. We have seen a 18% change in the number of new homes under construction and a 42 sum over the previous year.
Not changing, competition. Right now there are tons and tons of buyers sitting on the sidelines trying to time the market, thinking they can balance the exact day when home prices with come down, interest rates will come down and there will be an endless supply of gorgeous homes that nobody else wants besides you. Well, welcome to the real wold of real estate 2024. The competition for the best homes will be fierce once the spring comes, multiple offers, inspection and appraisal waivers will be in full use.
So what can you do? Fish upstream and jump the spring market! Right now is your best chance to get ahead of all of those people sitting on the sideline. Have a consultation, get pre-approved and start looking. In January of 2023 the market exploded and we expect that it will happen again but with one huge difference, that is falling interest rates. This will bring even more buyers into the market, the expectation is that homes sales and prices will escalate substantially in the fall of 2024 and the spring of 2025.
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